Wednesday, September 19, 2012

One month ago, Australian broadcaster SBS aired an investigative story on its Dateline television program called “The Last Frontier” about 12 controversial dams being built in the jungles of Sarawak, Malaysia on the island of Borneo. It was one of the first times that a major international news network raised attention toongoing human rights violations in Sarawak that have gone largely unnoticed outside Malaysia. If you visit the SBS website, however, you will notice a large warning sign beneath the video that says:

“ALERT: THIS STORY WAS THE SUBJECT OF A FORMAL COMPLAINT. THE SBS OMBUDSMAN HAS FOUND THERE WERE INACCURACIES AND BIAS. FOR DATELINE’S CORRECTION AND APOLOGY, CLICK HERE.”

SBS’ apology was the result of intense lobbying by Hydro Tasmania, an Australian company that is helping the Sarawak government to build the dams. What happened?

The August 21st Dateline story describes how tens of thousands of indigenous people in Sarawak are being removed from their lands to make way for the rapid construction of 12 dams. Many of these people are being left without land, livelihoods, or adequate compensation. Journalist David O’Shea interviewed indigenous communities who were frustrated at being unable to have their concerns addressed by the government, and Sarawak government officials who argued that the dams would bring prosperity for the greater good of Sarawak.

The dams are being developed by Sarawak Energy Berhad, a company owned by the Sarawak government. Two Chinese companies—the Three Gorges Corporation and Sinohydro – are constructing the dams. Hydro Tasmania (through its subsidiary Entura) is acting as a technical advisor and manager for the projects.

The Sarawak dams controversy

The evidence of corruption and human rights abuses surrounding the Sarawak dams is well documented, and the Dateline story highlighted many of these concerns. The head of the Sarawak government, Chief Minister Taib Mahmud, has been in power for over 30 years andhis family members have controlling ownership of many of the companies receiving contracts. While promoting the development of the dams, Chief Minister Taib simultaneously oversees the environmental board that is in charge of reviewing the projects for potentially harmful impacts.

Malaysian government officials have also acknowledged the human rights concerns surrounding the dams. In 2011, after 10,000 indigenous people affected by the Bakun Dam had spent a decade of severe poverty in the resettlement town, the Prime Minister of Malaysia visited the community to promise more compensation. In 2009, the Malaysia Human Rights Commission identified several ongoing concerns with the Murum Dam that is now under construction. No official investigation has examined the next-in-line Baram Dam. However, over the past year, hundreds of indigenous people have actively spoken out against the project and the lack of meaningful consultations. Despite these concerns, the Sarawak government has not made public any information about the Murum's or Baram Dam’s environmental and social impacts. Hydro Tasmania has even acknowledged these concerns to some extent, printing in its latest annual report: “safety and environmental compliance are not given as much importance here.”

Chief Minister Taib Mahmud, head of the Sarawak government, from the Dateline story

How Hydro Tasmania lobbied SBS to remove the program

The Dateline story highlighted Hydro Tasmania’s central role in providing technical advice and support for Sarawak Energy Berhad as it builds the dams. According to Hydro Tasmania’s latest annual report, one of its employees is acting as project director for the Murum Dam currently under construction. The employee will also be a project director for the next two dams and in particular will be responsible for “gaining environmental approvals and community acceptance of the project.”

Hydro Tasmania issued a quick response to the story, arguing that its role in the projects had been exaggerated. In a press statement on August 22nd, it said, “We are extremely disappointed that despite being given extensive information about our limited work in Sarawak the [Dateline story] focused on unsubstantiated claims that stated, among other things, we were building dams and should be responsible for all environmental, social and economic aspects of the various projects in Sarawak.”

The company also submitted a complaint to SBS’ ombudsman, who is charged with reviewing the journalistic integrity of SBS stories. After reviewing the Dateline story, the SBS Ombudsman concluded that “the totality of the report was inaccurate and misleading,” and that “the statements made about the role of Hydro Tasmania are not accurate.” Hydro Tasmania immediately posted this apology on its website.

Outrage from Sarawak’s watchdogs

Those who are monitoring the corruption around the Sarawak dams were outraged. Mr. Baru Bian, the opposition leader in Sarawak’s parliament, sent a letter to SBS describing some of the corruption surrounding the dams and saying: “The [Dateline story] only touched on a monstrous injustice and yet this was enough to trigger a violent response from those powerful forces who are not used to such exposure.”

He further noted that “It was important for Australians to know that…Hydro-Tasmania is now giving key professional advice and lending respectability to the next raft of similar projects that will cause even more displacement and distress to the people.”

Likewise, the Sarawak Report—an investigative blog that documents corruption in the Sarawak government—described the importance of having this story reach the people of Sarawak despite the government’s strict media censorship: “SBS did not flinch and the programme duly caused waves amongst Malaysian satellite viewers, who saw scenes for the first time of the floating villages destroyed by the Bakun Dam.”

The Sarawak Report added that Hydro Tasmania is a significant advertiser on SBS.

What are Hydro Tasmania’s responsibilities in this case?

The controversy over the Dateline story raises important questions about the relationship between businesses and human rights. Hydro Tasmania is not the lead builder of the dams, and appears only to play an advisory and managerial role. As a consultant, does Hydro Tasmania have a responsibility to pay attention to human rights violations in the projects that it supports?

According to the United Nations, the answer is unambiguously yes. In 2011, the UN Human Rights Council adopted the UN Guiding Principles on Business and Human Rights, which outline international standards for how companies are expected to act when faced with potential human rights violations in their operations. The Guiding Principles have been endorsed by all major governments of the world, including Australia, China, India, and the United States, and by many of the world’s leading companies. The standard has also been integrated into the OECD Guidelines for Multinational Enterprises, to which Australia has committed. Hydro Tasmania has committed publicly in its Sustainability Code to follow international best practice, presumably including this one.

Dateline interview with Hydro Tasmania CEO

The international standard is quite detailed, but the gist is this: companies have a responsibility to respect human rights in all of their business activities. It does not matter if the company only provides consulting services and is not the lead developer—it is still expected to conduct due diligence to ensure that it is not contributing to human rights violations. In a state such as Sarawak, where corruption is well-documented and deeply embedded at the highest levels of government, heightened due diligence is required before a company decides to engage.

What kind of due diligence did Hydro Tasmania conduct before it jumped into the Sarawak dams? In an interview on ABC Radio Australia on August 22, CEO Roy Adair admitted that the company had not done anti-corruption auditing before agreeing to work with SEB. There was also no indication of any human rights due diligence. The extent of their due diligence was that “we have checked that Sarawak Energy Berhad is a member of the International Hydropower Association and following the [IHA’s] protocol on sustainability.”

Becoming a member of an international lobby group such as the IHA is not enough to prove that human rights are being respected. Hydro Tasmania’s actions fall far short of the human rights impact assessment and other steps described in the UN Guiding Principles on Business and Human Rights. By sharing in the financial benefits of the Sarawak dams and helping to advance these projects forward, Hydro Tasmania also shares in the responsibility for the human rights violations that are taking place.

The mess SBS finds itself in

Now SBS is trying to decide whether to remove the story on Sarawak from its website. The implications are worrisome. One of Australia’s leading companies has demonstrated its willingness to look the other way while serious abuses take place under a government with a track record of poorly managed resettlement of indigenous people. One of Australia’s leading news agencies has backed away from an important story, perhaps discouraging other journalists from covering the human rights situation in Sarawak. Next May, the world’s leading hydro companies will meet in Sarawak for the biannual conference of the International Hydropower Association, where they will further praise the Sarawak dams as “best practice” that they would like to replicate around the world. And the two Chinese companies involvedintend to continue investing in Sarawak dams without any concern for the human rights, environmental, or corruption implications.

SBS’ own Code of Conduct suggests that public interest stories such as this one, which highlights discrimination against indigenous people and finds evidence of corruption, are entirely appropriate for a program such as Dateline. Indeed, even after the SBS dispute emerged, Al Jazeera aired a version of “The Last Frontier” on its own network on September 14.

SBS and the Australian government should not let Hydro Tasmania wash its hands of this matter quite so easily. Both should be asking more questions of Hydro Tasmania’s role in the controversial Sarawak dams.

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